Your browser doesn't support JavaScript or JavaScript support has been disabled. You must enable JavaScript to use this application.

I am owner of a mortgage company. A former loan officer ordered a name directory from Ameritech's yellow pages division. He was not authorized to do so. I have been trying to resolve this issue for close to a year. I was finally played a recording of the transaction. The former employee requested that the directory be shipped under his name. He only provided his name and his social security number. The telemarketer's level of verification of authorization was the leading question: ''You have authorization to order this, don't you?'' Needless to say, the directory was received by the loan officer who shortly thereafter left to open up his own mortgage company. Are there any laws that require telemarketers to obtain some level of verification of authorization status other than a leading question? The bill has gone to collection. What can I do?

Asked on 4/17/02, 3:20 am

1 Answer from Attorneys

You did not say how much was at issue. That said, there is a notion under the law known as "apparent authority." Apparent authority refers to that situation created when a principal, such as a corporation, manifests to a third person that an officer or agent may act on its behalf, and such third person in good faith believes that such authority exists. In such a case, lack of actual authority, express or implied, is no defense.

In other words, it is possible that your company could be held liable for the bill b/c Ameritech might have reasonably relied on the statements of your employee. Of course, there is an issue as to whether Ameritech did rely reasonably, since you did not say anything in your question that you or anyone else at your company (other than the employee himself) gave Ameritect the impression that this employee had authority to bind the company.

The better course might be in negotiating a settlement amount w/Ameritech -- make sure you get a release of all claims from them -- and then go after the former employee.